Corporate Governance and Firm Investments

• Main Authors: Shun-Chieh Chang, 張舜傑
• Other Authors: Yanzhi Wang
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/ht3x35

碩士 === 國立臺灣大學 === 財務金融學研究所 === 106 === The purpose of this study is to examine the relationship between a company''s investment decision and its corporate governance using samples of Taiwan listed firms during the period from 2006 to 2016. Investment decision by a company is measured by working capital, long-term investment and capital expenditure respectively. We expect to capture a more comprehensive degree and effectiveness of corporate governance under the abnormal governance index. The study provides empirical evidence that there exists a statistically significant negative correlation between abnormal governance index and working capital investment. Also, under market capitalization-clustered regression model, capital expenditures are positively related to the abnormal governance index respectively, which could be explained by common phenomenon for high-cap companies with more access to outer funding by higher confidence on their internal governance than those in low-cap. The last subsection of this study includes another control variable, the deviation of cash flow and voting rights followed by La Porta (1999). This variable is aimed at gauging whether the abnormal governance index established in this study can retain its explanatory power of the aforementioned regression model. The results suggested small differences from the previous empirical statistics, showing that the abnormal governance index does indeed provides the ability to explain the changes of working capital investment variables.